FTC Explores Privacy Concerns Raised By Smart TVs

In the earliest days of television, when broadcasters transmitted programs over the air, they couldn't collect much information about the viewers who watched the shows.

New "smart TVs," however, which connect to the Web, are able to collect and transmit data about viewers. But this capability may raise questions about whether the TVs are violating consumers' privacy -- especially because not all viewers realize that smart TVs transmit data.

The Federal Trade Commission explored those questions at a seminar on Wednesday afternoon.

"It matters whether consumers think of their Smart TV as a PC or a television," FTC consumer bureau protection head Jessica Rich said at the event's kickoff.

"From the moment we bought our first personal computer, there was data collection and data-driven advertising," Rich said, adding that people now expect at least some data collection online.



"By contrast," she continued, "the television industry did not evolve with data collection as a critical component."

Panelists at Wednesday's discussion explored a range of issues surrounding smart TVs and data collection, including consumer attitudes toward connected devices, and whether self-regulation by the industry can adequately address privacy risks posed by smart TVs.

Serge Egelman, a University of California, Berkeley privacy expert who has researched consumers' beliefs about connected devices, said people "don't expect their TVs to be recording their viewing habits."

Egelman also expressed doubt over whether industry groups could address privacy concerns through self-regulatory codes.

"Self-regulation in the privacy space has been an abject failure," he said, adding that many online privacy policies are difficult to comprehend.

"I'm not saying we need new regulations to regulate how data is shared," added. "But we do need to do much better in terms of disclosure."

Emmett O’Keefe, the Direct Marketing Association's senior vice president of advocacy, countered that the industry offers a "robust system" for providing notice, choice and control. The current industry approach requires companies to use the "AdChoices" icon to inform consumers about online tracking. Clicking on that icon also enables Web users to navigate to sites where they can opt out of receiving behaviorally targeted ads.

The DMA on Wednesday released a report advocating a self-regulatory approach. "Next-Generation TV is a prime candidate for a self-regulatory framework that applies a consistent set of reasonable data practices across diverse actors," the report states.

Participants at Wednesday's seminar also discussed how current laws, including the federal Video Privacy Protection Act, might apply to smart TVs.

Vizio is facing a potential class-action lawsuit for allegedly violating that law by tracking TV viewers and then sharing data about them with companies that send targeted ads to people's phones, tablets and other devices. The Video Privacy Protection Act, passed in 1988, prohibits video providers from disclosing "personally identifiable information" about people's video-viewing history without their explicit consent.

Vizio also says the information it allegedly disclosed -- including IP addresses, MAC (media access control) addresses, and product serial numbers -- isn't personally identifiable.

The judge presiding over the lawsuit has not yet ruled on either issue.

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